Obama’s Green Dream: Would His Renewable-Energy Plan Make a Difference?

Barack Obama’s week in the media sunshine ended abruptly with John McCain’s surprise pick of Sarah Palin for his vice-presidential running mate. But after Thursday’s big speech, it’s worth taking a look at one of the centerpieces of Sen. Obama’s energy policy: The call to invest $150 billion in renewable energy like wind power, solar power, and second-generation biofuels over the next decade.

That sounds like a big number, even if it works out on a yearly basis to a more modest $15 billion. But how does it compare to the actual challenge of overhauling the entire U.S. power sector, which is still overwhelmingly dependent on coal, natural gas, and nuclear power?

Earmarking $15 billion a year amounts to less than what the U.S. government spent last year on all energy subsidies, but it would be a lot more than what the government spent on “renewables.” Last year, Washington paid $16.7 billion in federal energy subsidies, with $4.8 billion for renewables, including ethanol.

On paper, Sen. Obama’s plan looks like a way to easily finance continued, long-term support for renewable energy—support that has been tripped up in Congress by budgetary “pay-go” rules and Republican opposition so far. And many in the clean-energy game figure if they can just get long-term price support for things like wind and solar power, the private sector will take care of the rest. After all, even with the specter of subsidies expiring at the end of this year, the U.S. has broken records for new wind and solar power installations.

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